NHTSA's Rosekind is cracking down on U.S. auto industry

The new administrator of the National Highway Traffic Safety Administration, Mark Rosekind, is earning praise from some of the NHTSA’s harshest critics. For years, safety advocates have alleged that the agency’s top leaders were too cozy with industry leaders.(Photo: 2011 photo by Paul Sakuma Associated Press)

There's a new sheriff in town -- and he's cracking down on the U.S. auto industry.

When Mark Rosekind was sworn December as the new administrator of of the National Highway Traffic Safety Administration, the agency faced frequent criticism for its weak response to multiple safety crises.

NHTSA was belittled on Capitol Hill during hearings over the General Motors ignition switch crisis last year and blamed for not taking aggressive action in 2009 when Toyota's sudden acceleration problems surfaced. And in 2013, the agency was openly challenged by Fiat Chrysler Automobiles on its initial call for recall of 2.6 million Jeep SUVs. FCA later agreed to a lesser recall.

But this past week, Rosekind's NHTSA unleashed a stunning display of force. After months of wrangling with Takata, one of the world's largest airbag manufacturers, Rosekind announced a consent agreement had been reached with the company to expand its recalls to nearly 34 million cars and trucks.

"I definitely think that NHTSA is getting tougher," said Michelle Krebs, senior analyst with AutoTrader.com. "They got clobbered with the Toyota recalls, and with the GM recalls for being too slow to do anything. Rosekind vowed in December that he is going to be tough and here it is."

NHTSA Administrator Mark Rosekind(Photo: NHTSA)

Many automakers already have restructured how they monitor and report safety defects, but a tougher new regulatory era could force them to make even more changes, leading to more vehicle recalls and forcing automakers to spend more time and money self-policing their products.

Rosekind, 60, has a mandate to ride herd on automakers over safety issues and compliance. He talked tough in his early days on the job, but few really knew what to expect until last week when he showed the world that he means business -- even if it means making automakers squirm.

Getting back on track

He is wielding both a carrot and a stick.

Rosekind traveled to Detroit in April to meet and greet top auto officials and see their safety technology. A week later, he dropped the hammer.

For the first time, Takata admitted that its airbag inflators are defective in a recall that spans 11 different automakers, across multiple brands, makes and models.

The Takata news came just 24 hours after Rosekind said the agency would hold a public hearing on July 2 to force Fiat Chrysler Automobiles to explain what NHTSA says is a poor completion rate for repairing cars and trucks spanning 20 separate recalls affecting 10 million of the automaker's cars and trucks.

Later in the week, NHTSA announced it would take charge of the Takata recall process, using legal authority it gained in 2000 but has never used before.

"He is going to be the cop on the beat. He doesn't care if he is popular or not," said Joan Claybrook, a former NHTSA administrator and current safety advocate. "I think he is going to get the agency back on track in terms of enforcing the law."

In 2014, there was a record number of vehicles recalled and massive publicity of the failings of the government, the agency and automakers including General Motors for its ignition switch recall, Honda and others tarnished by the Takata air bag recall and Jeep's battle over the safety of vehicles with gas tanks in the rear of the vehicles, to name a few.

Fallout from the high profile recalls reached a fever pitch last summer and continues today with ongoing criminal investigations, lawsuits, congressional hearings and recriminations, agency and third party investigations and an overall public confusion and outcry that their safety was perhaps knowingly compromised.

Takata logo(Photo: Takata)

"Newly acquired iron fist"

Into the fray walked Rosekind, a transportation safety professional and sleep expert, to succeed acting administrator David Friedman.

He pledged to make the roads safer again and observers say he is working to make good on it.

Insiders have been surprised at the swift and sweeping nature of action Rosekind has already taken.

In fact, there are grumblings among automakers about some of his tactics, saying they seem to be driven by politics rather than data.

He is more collaborative in private than in public and insiders have confided that there have been times when they thought resolutions had been hammered out only to learn, often in the media, that it was not the case and strong-arm tactics were being used instead.

The 11 automakers impacted by the Takata recall were not consulted or briefed prior to Thursday's press conference announcing it would be expanded.

They say they could have provided better data about their affected models and been prepared to answer the questions of an anxious public if they had been alerted prior to the press conference.

"Manufacturers need to fix recall defects once they are identified," Rosekind said last Monday after announcing plans for the July 2 hearing to evaluate FCA's recall repair rates. "At NHTSA, our target is the remedy of every single vehicle on the road in a timely fashion and at no cost to the consumer."

Claybrook said Rosekind is moving quickly because he knows he might not have much time left. He was appointed by President Barack Obama, who only has 18 months left in his second term as president.

Rosekind could hang onto his job if a Democrat is elected president or even if a Republican is elected, but it would be unusual.

For years, safety advocates have complained that the agency relies too heavily on auto companies to self-report problems and have alleged that its top leaders are too cozy with industry leaders.

Now, those who have been NHTSA's harshest critics are beginning to praise Rosekind.

"The (Takata) story has played out as a win for the agency and another coat of polish on its newly acquired iron fist. And we find little to argue with there," Sean Kane, founder and president of Safety Research & Strategies said Thursday in a blog.

Undermanned, understaffed?

Still, concerns persist that NHTSA is understaffed and under funded.

With just 612 employees, the agency is responsible for overseeing the safety of all vehicles on the nation's roads and an auto industry that employs more than 900,000.

The agency's Office of Defects Investigation -- a key agency in charge of policing safety defects -- has just 20 defect investigators, according to the agency's budget proposal.

This year, Rosekind is asking Congress to approve a $908 million budget that would triple the spending for its Office of Defects Investigations to $31.1 million.

However, the House Appropriations committee essentially has denied that request and is recommending a budget of just $837 million.

"Our oversight of NHTSA over the last year has revealed that problems facing the agency run deeper than staffing or funding," said Charolotte Baker, a spokeswoman for the House Energy and Commerce Committee.

Some, such as Sen. Edward Markey, D-Mass, favor a bigger budget for NHTSA, and the final budget could change after it is considered by a Senate committee and hashed out by both chambers.

Using every available tool

For now, Rosekind appears to be determined to use all of the tools the agency has, including some that it's never used before.

On Thursday, NHTSA said that it is extending its federal oversight of GM's' handling of safety issues for an additional year, which means it will review all decision-making and communications.

The oversight authority comes from a consent order that GM agreed to in May 2014 following the recall of 2.6 million older model cars with potentially faulty ignition switches that had a defect the automaker knew about for years.

The agency also is exercising legal authority it gained in 2000 for the first time in its history to coordinate Takata's airbag recalls.

"NHTSA is launching a legal process that will allow us to bring together auto manufacturers whose vehicles are affected, along with Takata and other parts suppliers," U.S. Transportation Secretary Anthony Foxx last Tuesday. "That way, they can organize this recall effort and get it done as quickly and effectively as possible."

The authority comes from the Transportation Recall Enhancement, Accountability, and Documentation Act, or TREAD Act that Congress enacted after a Ford Explorer and Firestone tire recall.

All of this leaves automakers, such as FCA CEO Sergio Marchionne, uneasy.

"We are entering a new phase of regulatory oversight. I think we need to work with the agency to determine the proper level of cooperation," Marchionne said last week . "The real issue is that for organizations like ours, adjusting to this new regulatory environment is going to be painful."